Houser v. Lamont , 55 Pa. 311 ( 1867 )

The opinion of the court was delivered, November 11th 1867, by

Agnew, J.

— The verdict of the jury under the specific instruction of the learned judge of the Common Pleas establishes that the deed from Bowman to Houser was a mortgage and not a sale. The evidence fully sustains the finding that he accepted it as a security for the money he advanced for the benefit of Miss Lamont. The peculiar and governing feature of the case is, that Bowman, who purchased the premises at the Orphans’ Court sale and had verbally agreed to sell them to Miss Lamont for the same price he paid, did not deny his sale to her, but recognised and made it the foundation of his conveyance to Houser, and came into court and testified to it. Being examined as a witness on part of Miss Lamont, he testified that he had sold the property to her and she had paid him $975 in money and was credited by him with $74, the surplus of the rents he received over the interest. Wishing to realize his money, he asked a Mr. Boss to advance it for Miss Lamont on the security of the property. But on informing Miss Lamont of liis purpose, she preferred that Mr. Houser should take it, as he was her friend and neighbor. Houser interested himself for her, spoke to a Mr. Dunlap to advance the money for her, but finally concluded to do it himself. In the mean time he had dissuaded Boss from advancing it. Bowman testifies that then he conveyed the property to Houser upon the same condition he held it, which was that Houser should hold it until all the money was paid. He states that he had paid $1875 for the property, and that the deed was made to Houser on his payment of $825.27, the balance Miss Lamont then owed him. Thus it appears, by the testimony of Bowman himself, the only party who could set up the Statute of Frauds against Miss Lamont, that he not only conceded her title, but conveyed to Houser on the very basis of her ownership, and receiving from Houser the balance only, which she owed him on her purchase. Bowman did not sell, nor did Houser pay for the value of Miss Lamont’s interest in the premises. Houser afterwards repeatedly admitted the true relation he sustained to the property, to wit, that of a mere lender of money upon its security; and, indeed, did not deny it until bad feeling sprang up, when, on taking advice, he concluded to set up the Statute of Frauds against her title, and this is now the position taken in the argument.

But Houser does not stand in a position to set up the statute. He is the plaintiff in the ejectment and must stand upon his own title, which is only a mortgage, and the defendant has tendered and brought into court the money due upon it. He is not an absolute purchaser from Bowman and can use his ejectment only to enforce payment of the money due to him; but instead of this he seeks to convert his mortgage into an absolute conveyance, by setting up the Statute of Frauds, which Bowman had waived, and thus to hold the property without having paid the major part of its value. To suffer this would be to permit him to perpetrate a fraud, by obtaining the title on the pretence of a loan of a small part of its value from one who conceded Miss Lamont’s title and treated with him expressly upon the basis of her ownership. Bowman did not convey Miss Lamont’s interest in the property, except as a security for Houser’s advance to pay her debt, and it would be a gross fraud for the latter now to hold that interest under a conveyance made for a different purpose. Probably / nothing is better settled in this state than this; that a deed taken ; as a security for the loan of money is but a mortgage, and cannot by any form of words or other means, be converted into an absolute conveyance: Colwell v. Woods, 3 Watts 188; Kunkle v. Wolfersberger, 6 Id. 126; Holsey v. Trevillo, Id. 407; Rankin v. Mortimere, 7 Id. 372; Hiester v. Maderia, 3 W. & S. 384; Todd v. Campbell, 8 Casey 250; Kellum v. Smith, 9 Id. 158. Houser being a mere mortgagee by his arrangement with Bowman, the equity of redemption vested in Bowman for the benefit of Miss Lamont, and he only could contest her title on the ground of the Statute of Frauds. This he has not done, but he came into court as a witness in her behalf in support of her title by purchase from himself. Here it is that the special feature of the case already noticed comes into play. It is settled equity law that courts of equity will enforce specific performance of a contract within the Statute of Frauds, where it is confessed in the answer of the defendant: 2 Story’s Equity, § 755. The reason, says Judge Story, is, that the statute is designed to guard against fraud and perjury, and in such a case there can be no danger of that sort — it is not within the mischief intended to be guarded against by the statute. Acting upon this principle this court held in Christy v. Brien, 2 Harris 248, that a parol sale without delivery of possession would be sustained when supported on the trial by the oath of the vendor. “ The single question,” said Gibson, C. J., “is whether it is taken out of the Statute of Frauds by the acquiescence of the vendors, who are the plaintiffs’ witnesses, promoting a recovery by their testimony, instead of opposing it even by a wish. They stand in the attitude of respondents in a bill in equity, confessing the contract and refusing to plead the statute. They not only confess it, but they swear to it.” In the Harrisburg Bank v. Tyler, 3 W. & S. 373, the same judge held that the declarations of a trustee of an investment being made by him in trust, after his death became evidence of the fact, as the -confession of one peculiarly cognisant of it, whose sacrifice by the narration was the equivalent of an oath. Bowman having, therefore, recognised and acted upon the interest of Miss Lamont in the land in the very transaction with Houser, and afterwards coming into court and testifying to it as her witness, it does not lie in the mouth of Houser, a mere mortgagee, to contest the fact. He does not need the Statute of Frauds to protect his mortgage, and will not be suffered to set it up to defeat an interest he never paid for, and which it was the intention of Bowman and himself to preserve to Miss Lamont. To set up the statute, which Bowman refused to plead, would be a fraud, by protecting him in that which he neither bought nor paid for.

These views cover all the assignments of error, and the judgment is, therefore, affirmed.